DOW JONES NEWSWIRES 
 

Hertz Global Holdings Inc. (HTZ) on Monday raised its car-rental rates at North American airport locations to help offset higher vehicle depreciation costs and increased maintenance costs.

Stagnant credit markets, slumping demand for travel and the automobile industry's hardships are hobbling rental-car companies. Fewer travelers are renting cars, and the industry is struggling to find buyers for used automobiles and secure financing to purchase new ones to replace them.

As a result, Hertz, rival Avis Budget Group Inc. (CAR) and other companies are lobbying Congress to allow them to use Troubled Asset Relief Program funds to finance new auto purchases.

Hertz said the most recent price increases - $5 a day or $30 a week - move the rates closer to last year's levels when the company was trying to offset skyrocketing gas prices. The latest move doesn't affect negotiated contract rates. Hertz said the average rate fell 2% the past year.

Shares jumped 9% to $5.69 on the news, but they are still barely half the level seen in September.

Last month, Hertz said it was cutting more than 4,000 jobs, or about 13% of its global work force, as the industry deals with slumping demand. Chairman and Chief Executive Mark P. Frissora added that volume, pricing and residual values continued to decline during the fourth quarter and the company couldn't predict when markets would improve.

Standard & Poor's Investors Services has said the economic crisis has taken a harder-than-expected toll on the car-rental industry compared with previous downturns. Analyst Betsy Snyder has attributed the slump to a significant reduction in airline capacity serving the U.S. market, the current ownership structure of the companies, the weakness of the auto makers, and the inability of the companies to gain access to the capital markets.

-By Lauren Pollock, Dow Jones Newswires; 201-938-5964; lauren.pollock@dowjones.com